May 15, 2023
There’s a retirement problem in America. That is, not enough people are adequately preparing for life after they stop working.
Credit Karma did a survey recently that found almost 20% of Americans aged 59 and up have no retirement accounts. Even worse, 27% of all respondents said they’ve set aside NOTHING for retirement, including 25% of Generation X workers and 27% of the 59-and-up crowd.
The concept of net worth – your assets minus your liabilities – is lost on too many people. As you age, you want your net worth to increase. Spending your golden years paying off debt is not ideal. But that Credit Karma survey shows 21% of those aged 59 and older have a net worth of $0 or less. They owe more than they own.
I see more statistics every year showing people not taking retirement seriously. Per Boston College’s Center for Retirement Research, there’s a roughly $7 trillion (and growing) retirement shortfall in the U.S. That means people will be forced to accept a lower standard of living when they stop working.
Asset management firm Schroders identified top retirement worries for savers. They include:
- Inflation – 65%
- A major market downturn – 53%
- Health costs – 52%
- Taxes – 49%
- Not being able to afford a desired lifestyle – 49%
The reality is now that pensions are mostly gone. You can count on Social Security to an extent, but it shouldn’t be the bulk of your retirement income, and certainly not all of it. Retirement savings is something you must take charge of yourself. Unfortunately, too many Americans aren’t taking retirement savings seriously.